Debt management ratio or solvency ratio

Meaning of solvency ratio= Solvency ratio refers to the company can payable or not of the long term debt non current liabilities. it also shows the payable capacity of the company at a time.

  • Debt To equity ratio =Debt/Equity OR Long term debt / share holder equity+ retained earning
  • Debt To Total capital ratio = Long term debt / share holder equity + long term debt
  • Debt ratio OR ( Total debt TO Total Assets ratio ) = Total debt /Total Assets
  • Interest coverage ratio = EBIT/ interest

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